Starting a Restaurant
Putting Your Money Where the Mouth Is

Ever dream about starting a restaurant?

Food being one of peopleís basic needs, setting up a restaurant is a good business option. Another good reason is that, peopleís love of convenience is driving more and more people to eat out. Isnít it fun to skip cooking yet still get a fill of your favorite foods and not have to wash dishes afterwards?

woman eatingLike any other business, however, careful planning and dedication is needed to ensure success in starting a restaurant business. Lukewarm interest and commitment may also mean lukewarm profits!

If you are clueless how to start, donít fret. Read on for a quick rundown of the steps to get you started on the path of starting a restaurant. In a nutshell, you have to nail down four key areas to succeed in the restaurant industry: excellent food, superb service, terrific location, and impressive marketing.

With these four ingredients in the mix, your patrons will help your business and your reputation pop.

Identifying Your Target Market

Who would you like to cater to? Would you rather have the Generation Y (those born between 1980 to 2000), the Generation X (born between 1965 to 1977), the Baby Boomers (born between 1946 and 1964), the Empty Nesters (people aged 50 to 64), or the Seniors (65 year olds and above)? It’s important to take note of these market categories of restaurant customers as age can be a good gauge of food preference as well as spending habits. The Generation Y-ers, for instance, usually prefer burgers, fries, or pizza. Some of these people are students or young professionals who are still establishing their careers, so they opt for fast-food items that are not too expensive.

Affluent professionals who can well afford high-end restaurants comprise the Baby Boomers group which makes up the biggest segment of the U.S. population.  They prefer restaurants with family-friendly, formal dining atmosphere. 

For a more complete description of the eating preferences of people under these market categories, check out this link:

Coming Up With a Concept

Choosing a concept is vital in starting a restaurant business. There are three primary categories of restaurants: quick service, midscale, and upscale. Quick service refers to fast food restaurants where food is prepared quickly and sold for a very affordable price. Midscale restaurants offer full meals, but the prices are perceived to provide good value.  Upscale restaurants, on the other hand, are pricey; they offer full table service with special focus on food quality and ambience. 

After you’ve got your preferred market category down pat, the next step in starting a restaurant business is to choose a concept. With so many different concepts to choose from such as seafood, steakhouses, family style, ethnic, casual dining, pizzeria, sandwich shop/delicatessen, coffeehouse, and bakery, a good place to start is to base it on your own food preference and lifestyle. Are you fond of Indian food, for instance? Are you a morning person or more of the nocturnal type? If you don’t mind being up at dawn, for instance, a bakery or casual breakfast and lunch restaurant may appeal to you. If night is your element, you may gravitate towards bar-and-grill type of restaurants, or pizzeria.

Choosing a Name

You can call your restaurant any fancy name you like as long as it’s tasteful (every pun intended) and that it clearly represents what you offer. Since you’re after name recall, however, it would be wise to choose a name that is easy to remember and spell.

After you’ve thought of a name, register it with your state. Start by contacting the Secretary of State’s office and requesting the forms that you need to fill out for this purpose. You may also inquire with them on how to search for state trade marks so that you can check if any part of your restaurant’s name is already registered. To check if the name or part of it is a Federally Registered Trademark, you may go to this link:

Writing the Business Plan

The business plan is the blueprint of your business. It should include the concept, target market description, menu and pricing, a detailed breakdown of your capital, expenses, and revenue forecasts, marketing strategy, and employee hiring and training programs. You may also include the challenges that you expect to encounter in starting a restaurant business, as well as the possible solutions to these challenges.

Picking a Location

A prime location is crucial in starting a restaurant business. When deciding where your business will be located, consider the following: traffic density, visibility, parking facilities, accessibility, terms of the lease, road construction/future developments on the site, and crime rate. If a particular area has a high foot and motor traffic, but it’s also notorious for being a high crime area especially at night, you will still not maximize your customer density potential as people will not feel safe there. Or, you may have identified a site that gets a perfect 10 rating in other factors, but a major six-month road construction or area development is being planned there; this could rob you of several months’ of sales.

Creating a Menu

It’s a good practice to be aware of current trends in people’s eating habits when starting a restaurant business.  Studies show that more and more people are into vegetarian or meatless alternatives, locally grown, organic food items, specialty coffees, and entrees with side orders. Also, more people consume chicken, beef and seafood these days than ever before. An insight into these trends is useful when starting a restaurant.

Children’s eating preference is a deciding factor in a family’s choice of dining place, so it’s important to include a wide array of kid-friendly, nutritious treats in the menu that your young diners can sink their milk teeth into.

Hiring Employees

Your employees being the frontrunners of your business, they can make or break your reputation as a restaurateur. Put a premium on  experience,  enthusiasm and optimism when filling in job vacancies for manager, chefs/cooks, servers, busboys, dishwashers, hosts and bartenders.

To hire good people when starting a restaurant business is one thing; to keep them is another. Studies show that well-trained staff are more efficient and confident and less likely to leave their work, so you must set in place good training programs for them. You may seek help from the National Restaurant Association for appropriate employee training programs.
The manager is the most important employee in your business, so the screening process for this position should be more stringent. An ideal candidate for this position is a people person who has strong leadership and decision-making skills.

Promoting Your Business

You have a strong business concept, a fool-proof business plan, a name that captures exactly the kind of message you want to convey about your business, an excellent location, solid menu, and efficient staff. All these efforts thus far will be in vain if nobody knows your restaurant exists. The next step in starting a restaurant business, therefore, is to spread the word!

While word of mouth is still the best type of promotion there is, marketing your business through signs, flyers, table tents, ads and what-have-yous is still essential especially if you are still starting your restaurant business. Enlist the help of local radio stations to reach out to your target demographics. Offer gift certificates such as a free slice of cake or a cup of coffee, dinner for two or discounts as prizes for on-air contests.

Nonprofit organizations are also constantly seeking sponsors for door prizes during Christmas and/or anniversaries. You may also try sport event sponsorships and frequent dining clubs.

In starting a restaurant business, the key to your customers’ hearts and brain (memory) is definitely through their stomach, so make sure that they have a remarkable, mouth-watering dining experience that they will want to talk about and recapture again and again.

You may check out these websites for a more detailed help in starting a restaurant business:
All Food Business
The Menu Maker
National Restaurant Association (NRA)
National Restaurant Association (NRA) Educational Foundation

Whether rain or shine, people would still want to eat!  

So, why not put your money where your mouth is and put up a restaurant? 

Check out informative and eye-opening tips about opening the following businesses:

Starting a Clothing Business

Starting a Spa

Starting a Flower Business

Start a Wine Business

Starting a Retail Store


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